Psychology, Economic Policy Design, and Implementation: Contributing to the Understanding of Economic Policy Failures in Africa

Economic policies implemented by many African countries have failed to produce the desired effects in terms of the economic recovery of the respective countries (Kwakye, 2011). Some African economists have attributed this failure not to the ineffectiveness of the economic policies alone but also to history, geography, politics and leadership (Kwakye, 2011). In line with this, this paper draws on both Thaler and Sunstein (2008) and K. B. Asante (2003) to show that there are non-economic factors (such as culture, psychology of the people, history, geopolitics, and a host of others) which deserve policy attention.

Asante (2003) has argued that economists often fail to ask themselves whether “an experience in economics is valid, without qualification, with respect to all peoples at all places at all times” while the “reactions of people to economic measures is often not given sufficient emphasis in the economic equation” (p. 132). He further intimated that factors such as culture, traditions, and national hopes and aspirations should be taken into account when designing economic policies. Indeed, in his chapter entitled “Can we manage with Economics alone?” Asante (2003) argues that:

Thaler and Sunstein (2008) refer to the extra-economic factors as nudges; they define a nudge as “any factor that significantly alters the behaviour of Humans [homo sapiens], even though it would be ignored by Econs [homo economicus]. Econs respond primarily to incentives” (Thaler & Sunstein, 2008, p. 8). Thus, both theses argue in favour of attempts at understanding the psychology of the targeted beneficiaries of any given intervention for effective implementation and success. In other words, they are both relevant to the extent that they demonstrate why economic policies that do not take into account the psychology of the target people fail.

However, Thaler and Sunstein’s (2008) thesis is of particular importance as it is linked to the mainstream psychological literature. This conceptual link is crucial to successful policy implementation as it enables researchers and practitioners in development economics and development studies to benefit from theoretical insights from psychology. Thus, this paper links practices in experimental psychology that are hardly discussed in relations to the development literature. For instance, Shadish, Cook, and Campbell (2002) summarized the three components of intervention or experimental treatment implementation as: (1) service delivery, (2) service receipt, and (3) intervention instruction adherence. Thus, if service providers deliver what is due the targeted beneficiaries, and the beneficiaries receive and accept what is due them, and they adhere to the instructions given, then there is a higher likelihood of the policy being effective. However, service receipt and treatment or instruction adherence both involve decision-making on the part of the beneficiaries. It is at this point that Thaler and Sunstein’s discussion on inertia or status quo bias becomes crucial as it affects decisions by the targeted beneficiaries of policy interventions. Thaler and Sunstein view inertia as the tendency for humans to prefer their current state of affairs or to remain at the status quo. Thus, inertia may be one of the key psychological variables that interfere with the successful implementation of economic policies in Africa. It is argued in this paper that experiences of poverty give rise to learned helplessness which leads to inertia. It is also shown that economic policies that fail to take account of these psychological constraints fail to produce the expected improvements in the living conditions of the majority of the poor in Africa. Indeed, this is consistent with the view of the American Psychological Association (APA) 2009 Presidential Task Force on the Future of Psychology as a STEM Discipline that “Technological solutions [and policy interventions] to large-scale problems routinely fail when they do not consider how people interact and behave in different contexts” (American Psychological Association [APA], 2010, p. 2).

In the remainder of the paper, a brief discussion on Thaler and Sunstein’s (2008) view about inertia is presented after which attempts are made to conceptually link inertia to learned helplessness. This recasts inertia in psychological processes as learned helplessness. Similarly, connections are drawn between learned helplessness and poverty via external locus of control (one of the psychological consequences of poverty). Further, the literature on the experiences of being poor is briefly reviewed to show how learned helplessness develops among the poor of Africa. In addition, the concept of “Pull Him/Her Down” (PHD) syndrome is introduced and shown to be an outcome of both learned helplessness and inertia. Recommendations are provided as to how economists and applied psychologists can work together to improve economic policy designs. Where possible, general African examples are given, and in some cases Ghanaian examples.

Inertia and Decision-Making

Economists Richard H. Thaler and Cass R. Sunstein (2008) wrote:

This suggests that humans will most likely select default options (or the pre-existing state or standard alternative) rather than respond to the actual incentives attached to the options available to them. Thaler and Sunstein (2008) attributed to the preferences for default positions or options to inertia; they view inertia as the tendency for humans to prefer their current state of affairs or remain at the status quo. According to them, homo sapiens (real human beings) rather than homo economicus (economic man in textbooks of economists) do not always make rational decisions because of inertia. This partly accounts for why economic policies fail: because the inability of humans to change the status quo by selecting the options with the best inherent incentive despite being given different options (since they cannot make rational decisions) leads to failures in the design of economic policies and their implementation. It has been argued that mainstream social science reflects the underlying folk knowledge and philosophy of the pioneers and the leading researchers (Yang, 2012). This implies that the worldview underpinning the canonical model of decision-making in economics reflects the worldview of the Homo Sapien Caucasoid than that of the Homo Sapien Africanus, given the theoretical formulations were initially proposed by Europeans. Thus, I extend this by saying that Africans are even less responsive to neoclassical economic policies because of this same inertia; this point is developed further to showcase how applied psychology can contribute to economic policy design in Africa and elsewhere. This is not meant to be exhaustive but rather illustrative of the possibilities for economic policy design. Having explored the concept of inertia or status quo bias, it is now in order to link it to the psychological concept of learned helplessness.

Learned Helplessness and Inertia

Seligman (1975, 1991) formulated the concept of learned helplessness after a series of animal experiments. Myers (2008) defines the concept as “the hopelessness and resignation learned when a human or an animal perceives no control over repeated bad events” (p. 57). For the purposes of this commentary, I will describe learned helplessness as the tendency for individuals to fail to act in circumstances where they have the opportunity do so, and thereby fail to make a meaningful change in their lives. This failure to act is often a result of past inability by themselves or their significant others to bring about change through their actions. This is the “Don’t worry yourself, nothing you do will change anything” and “We have tried it before” syndrome. In short, learned helplessness makes people less responsive to conditions or policy interventions that can change their lives for the better. This concept may explain the existence of status quo bias or inertia.

Before addressing the formation of learned helplessness, it is worth examining both the theoretical and empirical links between inertia and learned helplessness. Inertia suggests that there is an unwillingness to change while learned helplessness implies unwillingness and perceived inability to effect change. Hence, a perceived inability to effect change is very likely to manifest as an unwillingness to change. Thus, it appears that learned helplessness produces inertia. As a result, in order to understand how inertia develops, one needs to understand how learned helplessness develops.

There is some evidence to link the psychological experience of poverty to learned helplessness among persons living in developing countries. Studies in developing countries suggest that adolescents in resource-poor environments tend to display high external control orientation; this is to say that adolescents living in poor countries are more likely to attribute most life outcomes (whether success or failure) to beings or factors such as God, gods, luck, chance, witchcraft, and/or actions of powerful others (see Sinha, 1994). For instance, Sinha (1994) reported that adolescents with lower socio-economic status exhibit higher external control orientation with a higher reliance on significant others such as God and on luck for success (Sinha, 1994). Studies in Nigeria (Ige & Nekhwevha, 2014), Ehiopia (Wollie, 2009), India (Nasser, Singhal, & Abouchedid, 2011), and the Philippines (Hine, Montiel, Cooksey, & Lewko, 2005) have reported similar findings that persons from low-income backgrounds make external attributions.

There is also evidence to show that the poor in developed countries make more external attributions. For instance, Williams (2008) has reported that during economic recession, persons affected experience a growing sense of loss of control. In a study among Italian participants, Norcia and Rissotto (2011) further found that persons with a lower income tend to make more external attributions of wealth as opposed to those with high incomes, who make more internal attributions for their prosperity.

Contrary to these findings, Asiedu, Dzokoto, Wallace, and Mensah (2013) reported that middle-class Ghanaian university students make more internal attributions for the existence of poverty; internal attribution is the tendency for an individual to expect reinforcement or what happens to him/her to be the consequences of his/her own efforts or behaviour (Colman, 2006). However, they suggested that this contrary finding is an artifact of the sample they used, which is not representative of the general population of Ghana. Despite this contrary finding by Asiedu et al. (2013), the general conclusion is congruent with the view that adolescents in resource-poor environments tend to display high external control orientations (Hine et al., 2005; Ige & Nekhwevha, 2014; Nasser, Singhal, & Abouchedid, 2011; Norcia & Rissotto, 2011; Sinha, 1994; Wollie, 2009), which may result from the growing sense of loss of control (Williams, 2008).

Therefore, it is possible to argue that people who believe that their personal actions cannot change their life situations or outcomes (higher external locus of control) are more likely to also display a perceived inability to effect change (learned helplessness). Learned helplessness may also lead to a high external locus of control; thus, a bidirectional relationship between locus of control and learned helplessness can occur.

Thus, if poverty leads to a higher external locus of control among the poor, then it is equally possible that it may be responsible for the development of learned helplessness. Rabow, Berkman, and Kessler (1983) have linked learned helplessness to experience of poverty by suggesting that increased alienation of the poor results in learned helplessness. Indeed, the poor feel powerless, insecure, and lack opportunities in their personal lives. Given that the poor are socially excluded (Smith, 2010), it can thus be argued that this exclusion and lack of opportunities will lead to a belief that their actions cannot lead to changes in their life situation.

Intervention and Change

To provide a conceptual framework within which to situate rest of the discussion, the literature on inertia and learned helplessness is integrated with the experimental treatment implementation literature in experimental psychology (see Shadish et al., 2002, pp. 315–322). Shadish et al. (2002) identified three components of intervention or treatment implementations: (1) intervention delivery, (2) intervention receipt, and (3) intervention adherence. Service or intervention delivery refers to whether or not the beneficiaries receive the tangibles and intangibles that per implementation guidelines they ought to receive; service or intervention receipt refers to whether or not the beneficiaries are actually supplied with the tangibles and intangibles in the manner specified in the implementation guidelines; and service or intervention adherence refers to whether or not the beneficiaries follow the specified guidelines in the use of the tangibles and intangibles they are supplied. Here tangibles refer to things like money, handouts or pamphlets, relief items, tools, and related items whereas intangibles refer to new information, instruction, ideas, concepts and insights gained through the implementation.

An integration of Shadish et al.’s (2002) components of intervention implementation with the concepts of locus control, learned helplessness and inertia is presented in Figure 1. Following the above discussion about the link between poverty and inertia though learned helplessness, one should explore the literature on the experiences of the poor in order to identify possible mechanisms through which their experiences lead to the development of learned helplessness.

Psychological Experiences of Being Poor

APA (2000), based on the extant empirical literature, acknowledged that:

Similarly, other researchers have examined and catalogued the experiences of persons with low income or persons exposed to social exclusion. In a study of the psychological experiences of persons affected by the 1990-1994 UK recession, chartered occupational psychologist Dai Williams (2008) defined recession fatigue as follows:

After examining the psychological effects of the 1990-1994 UK recession, Williams (2008) reported that the personal experiences of recession fatigue include:

He also concluded that the long-term psychological effects of recession include “physical fatigue, impaired judgment, hopelessness, apathy and very short-term perspectives” (p. 24). In exploring the literature on the psychological theories of the causes and impact of poverty, Turner and Lehning (2006) reached a similar conclusion: “the conditions of poverty produce intolerable amounts of stress, which can lead to mental illness” (p. 7).

Though the above are the experiences of the persons in developed parts of the world, they are no different from the poor in the developing parts of the world. It is even possible to intimate that the experiences of the poor in the developing parts of the world are worse given that there are no or little state-level social support systems as opposed to the more developed parts of the world. As a result, the welfare systems put in place to support the poor in developed parts of the world may mitigate at least partially their psychological distress more than that of the poor in developing nations. Indeed, the stigma and discrimination that comes with being poor also connive with their dented self-belief to create this inertia. In Africa, slavery, colonialism, apartheid, unfair trade practices, subtle bigotry among others, combine with the experiences of being poor to worsen the case for African peoples.

Further, many people in the developed parts of the world do not realize that the above-mentioned plight may be experienced by the poor daily until their death, with no hope of a change in situation. As a result of this seemingly never-ending experience, many have developed learned helplessness which leads to inertia making them unresponsive to policy interventions that are even designed to improve their own livelihood. This violates two basic principles of economics: (1) people are rational and (2) people respond to incentives. This is inconsistent with the psychological view that human beings are rationalizing, seeking to appear reasonable to themselves and to others (Aronson, 2004).

Aronson (2004) suggests that human beings operate on psycho-logic and not formal logic. He draws on Festinger’s (1957) theory of cognitive dissonance to explicate this point, which points out that psychological discomfort or tension arises when one is simultaneously aware of two inconsistent cognitions (thoughts). Festinger suggested that to avoid this tension the individual must always maintain a balance, whereby one’s thoughts are consistent with one’s actions. Thus, instead of the human being doing what is objectively logical (in his/her objective self-interest), the individual does what is consistent with his/her beliefs or modifies his/her beliefs to make it consistent with his/her actions.

This is to say that cognitive dissonance leads individuals to make decisions (select options from alternatives) in ways consistent with their beliefs rather than actual benefits associated with the choice. When poverty results in learned helplessness (and consequently inertia), and in behaving in congruence with their beliefs, the poor may exert influence on one another so as not to act to effect changes in their life situations. Thus, cognitive dissonance has the potential to result in violation of the principles of economics and also more likely to act as a facilitator of an intergenerational transmission of learned helplessness and inertia among persons living in poverty.

Intergenerational Transmission of Inertia and the “Pull Him/Her Down” Syndrome

The pervasiveness of learned helplessness suggests that there are two main modes of acquiring it: (1) it can be learned directly and (2) it can be learned through intergenerational transmission. This paper will focus mainly on the latter as it forms part of what others call the culture of poverty (Lewis, 1998; Small, Harding, & Lamont, 2010).

Educational psychologist Stephen Pew (2007) cited and “embellished” an experiment conducted by Child (1938, cited in Oppong, 2011) in order to describe how culture is transmitted in a group. This experiment is as follows:

This can be used to illustrate how Africans who suffered damage to their self-concept transmit their learned helplessness across generations. This is because after many years of intergenerational poverty, many Africans may have resigned themselves to fate, as such an external attribution. This is to say that the older generation is unable to inspire hope and confidence in their young about the possibility of getting out of poverty.

Further, this trans-generational learned helplessness contributes to the Ghanaian “Pull Him/Her Down” (PHD) syndrome, or the “dog in the manger attitude,” a phenomenon outlined by Pew (2007) that holds back Ghana’s development. The PHD syndrome in its behavioural form is an offshoot of the learned helplessness developed by Africans during the days of slavery and colonialism that perpetuates the learned helplessness. Conditions of oppression (slavery and colonialism) often lead to situation where, after several years of resistance without tangible results, the victims develop a mindset of failing to act when actions will produce desired effects. The PHD syndrome refers to both conscious and unconscious attempts by members of a given social or cultural group to discourage and/or prevent its members rising to the top or outperforming them, thereby perpetuating poverty and failures in economic policy reformation/design.

Examples of the PHD syndrome abound across the African continent. For instance, some traditional rulers in Ghana were reported to have spoken against the use of the Asantehene’s (the King of the Asante Empire) image on the phone cards of the then Ghana Telecom (Akosah-Sarpong, 2004). It was reported that the decision was taken to honour him for his efforts in community development which was crowned with the visit of the then “World Bank President James Wolfson [who] visited him to discuss development co-operation” (Akosah-Sarpong, 2004). The agitations by some of the traditional leaders are indicative of PHD syndrome given that they were unhappy that one of their own was being honoured for his accomplishments. Akosah-Sarpong (2009) further argues that “Pull him/her down syndrome is so cancerous that it runs from the micro to the macro in Africa’s development process” (para. 1). Furthermore, Dr. Papa Kwesi Nduom, the 2012 flag-bearer of the Progressive People’s Party (PPP), attributed the causes of Ghana’s poverty to “an attitude that says we should look for the best people and tear them apart, pull them down syndrome”, among other factors (Peacefmonline, 2013, para. 1).

In talking about Nigeria, Amadi (2012) describes PHD holders as people seek to “destroy anything good especially when it involves the efforts of men of goodwill who through their selfless contributions have advanced the cause of national development” (para. 1). He further reports that such PHD that serves “just to tarnish the image of patriots and in effect prevent (sic) them from achieving or continuing in their stride of service to humanity has now taken dangerous dimensions” (para. 1). Kariuki (2014) has similarly reported the incidence of PHD syndrome in Kenya stating the “worst victims have been artists but athletes have also had a bruising experience at the hands of its [sic] own people” (para. 15). Chihota (2012) notes the prevalence of the PHD syndrome in South Africa, noting that it is “the most dangerous disease” (para. 1) in Africa ahead of HIV/AIDS and Malaria. Despite the variation in the presentation of the PHD syndrome, all the social commentators agree that it derails development in Africa. Specifically, the PHD syndrome makes the “victims” fail to engage in activities that would transform their lives and that of their communities as a result of learned helplessness whiles at the same the “victims” discourage others from engaging in the same or similar development activities.ⁱ

One way to explain the prevalence of the PHD syndrome in spite of its hindrance to African development is that it is perpetuated by the older generation, in order to minimize the tension they may experience if the younger generation succeeds where they could not, that is, to minimize the cognitive dissonance between their own capabilities and failures and the capabilities and failures of the younger generation. In other words, the older generation would feel less capable than the younger generation if the latter were to achieve progress where the former could not.

The PHD syndrome may be an outcome of both learned helplessness and inertia. Similarly, the PHD syndrome affects the implementation of interventions in that this pervasive discouragement compels members of a social group to refuse to accept the intervention outputs (tangibles or benefits) and to adhere to the intervention instructions. Thus, the PHD syndrome not only prevents “victims” from participating in a development process but leads them to discourage others from participating at the level of doing what the intervention requires of them.

Because humans are rationalizing beings (Aronson, 2004), “victims” of the PHD syndrome tend to discourage other community members whose efforts may improve their own living conditions in order to minimize the psychological discomfort they experience from observing others do what we attempted and failed or did not attempt at all because of fear of failure. Indeed, learned helplessness produces the PHD syndrome, which in turn continues to perpetuate the former. It ensures that its “victims” do not feel “stupid” and inferior to others.

Knowing how inertia developed from learned helplessness and how the PHD syndrome sustains the former, it is possible to contemplate solutions. In fact, this exercise is illustrative of McKnight, Sechrest, and McKnight’s (2005) first two levels of diffusion of psychological science into policy: (1) provision of context and (2) illumination. So far I have provided both “important background information about the conditions of a problem’s occurrence or the circumstances in which an intervention may have to be implemented” and an assurance that a solution is “possible and might be worth pursuing” (McKnight et al., 2005, p. 569). The third level of diffusion described by McKnight et al. (2005) is policy recommendations through conducting “translational” research. Applied psychologists interested in policy can have their greatest impact at all the three levels. The identification of the PHD syndrome, inertia, and learned helplessness as contextual factors that moderate the link between development interventions and poverty is at the first of level of diffusion of psychological knowledge into policy. At the second level, the formulation of theory or models helps illuminate how these contextual factors interact with the development intervention. Subsequently, conducting empirical studies to evaluate the models and to provide recommendations constitute the third level.

The Way Forward

Without a doubt, the overwhelming concern for many Africans is the perception that there is little hope that the African continent may prosper among the general African public. This demonstrates the pervasiveness of inertia in this region. Thus, in a continent where there is such inertia, Thaler and Sunstein’s (2008) libertarian paternalism (a relatively weak, soft, and nonintrusive type of paternalism which ensures that choices are not blocked, fenced off, or significantly burdened) may be appropriate for economic policy design in Africa to overcome the inertia. As noted earlier, learned helplessness, through inertia and the PHD syndrome, affects the implementation of interventions in that the inaction or status quo bias (inertia) and pervasive discouragement (PHD syndrome) lead members of a social group to refuse to accept the intervention and/or fail to adhere to the intervention instructions. This is to suggest that African economists and applied psychologists need to develop an understanding of the poor’s experience of their poverty and design policies that will actually improve their living conditions. Thus, once African social scientists have developed insights about the poor’s experience of poverty, appropriate interventions targeting poverty should be explored and implemented.

It needs to be emphasized that the issues raised in this paper are complex. As a result, simple solutions cannot be advanced to address them. This is particularly important given that there is very little endogenous knowledge (knowledge about the people, for the people, and by the people) in the form of indigenous theories and models on poverty and community development from which solutions can easily be fashioned out. In other words, Africans on the continent must develop such endogenous knowledge about the application of their psychology to the design of economic policies. Endogenous knowledge is the beginning of sustainable economic development (Oppong, 2013a, 2013b). Thus, recommendations made tend to be more long-term as further studies are required to create needed knowledge. However, in the interim, development interventionists in Africa should take into account learned helplessness, inertia, and the PHD syndrome when designing development policies.

One way the PHD syndrome may be addressed is through communicating to target beneficiaries how the PHD syndrome may affect their decision to participate or not participate in the development process. Role models who have observed the requirements of similar interventions should be presented to them; this exposure to successful role models may be facilitated as part of the service or intervention delivery and be done through either oral presentations by development intervention staff, in-person presentation of testimonies by the successful models themselves, or videos on testimonies by the successful models. Further discussion with the target beneficiaries about how to overcome the PHD syndrome will be also useful.

African economists need to work closely with African applied psychologists (especially social and industrial psychologists) during policy formulation as well as implementation, monitoring, and evaluation. The psychologist’s role will be to apply relevant principles of human behaviour to economic policy design in order to induce voluntary compliance as well as to overcome the resistance to change which is often ignored by economists. However, applied psychologists in Africa must also be ready to work with our economists to achieve the elusive human progress for Africa.

Related to the above, public officials in African countries should also consult applied (industrial and social) psychologists for recommendations on how to deal with the so-called attitude problems of Africans. It appears that often public officials are ready to blame underdevelopment on the attitudes of citizens but are unwilling to approach the professionals trained to address such issues.

It is also recommended that the Departments of Economics at various universities in Africa should introduce courses that expose students to the policy applications of psychology and economics and/or behavioural economics. In the case of Ghana (particularly at University of Ghana), ISSER’s MA/PhD Development Studies, Economics Department’s MA Economic Policy Management, and MPhil/PhD Economics programs should all incorporate courses on policy applications of psychology and economics into their curricula. Similarly, psychology departments should also mount courses in “psychology and national development” which will also consider policy applications of psychology and economics. This will help their students develop more useful and achievable economic policies upon graduation. However, African universities that have already introduced courses in behavioural economics should also train their graduates in qualitative research to enable them understand the experience of the poor and the policy implementation process. This is because such phenomenological studies will equip implementers of public policies with insights about the dynamics of policy design and implementation.

African psychologists (especially industrial and social psychologists) should show interest and conduct research in the areas of economic policy design. In Ghana, two studies are instructive; these are Jonathan Kuma Gavi’s (2009) research on Ananse Modelled Behaviour and Shadrack Dickson’s (2011) Social Psychology of Corruption research. More of such research is needed to provide insight on the issues of interest to economic policy managers and analysts. Further empirical studies on the PHD syndrome is required to find the appropriate antidote.

There must also be collaboration among African applied psychologists and economists through transdisciplinary research and conferences. For instance, the economists at African universities can organize joint economics and psychology conferences and extend the invitation to applied psychologists. Through such transdisciplinary efforts, we can assist our governments to design suitable economic policies. We can also equally benefit from such joint efforts through learning from each other the relevant theories in both domains.

Conclusion

This paper sought to explore the psychological factors that contribute to economic policy failure in Africa; thus, it attempts to offer explanations as to why economic policies fail and argues that inertia (the unwillingness of people to change the status quo) is related to how people respond to policies. In addition, inertia is integrated with the psychological literature on learned helplessness as well as Shadish et al.’s (2002) components of intervention implementation. It advances the view that experiences of poverty make individuals engage in more external attributions, which leads to learned helplessness and inertia. It also argues that learned helplessness and inertia lead to the PHD syndrome, and that both inertia and the PHD syndrome influence the decisions made by the poor in respect of adhering to the guidelines issued to beneficiaries as part of policy implementations. In that case, economic policies fail because beneficiaries may not receive the interventions as planned and/or refuse to engage in the expected patterns of behaviours for the utilization of the intervention. Thus, inertia operates as a motivational force.

In sum, Asante (2003) has argued that “we [Africans] have been emancipated a lot since independence but much remains to be done in the field of accepted concepts and original thought” (p. 31) and that the “future depends on the ability to generate and apply knowledge” (p. 106) and that those who fail to participate in knowledge generation are marginalized and left behind in the march of humankind towards progress. However, we have “the brains … not only to apply knowledge but also generate it” (Asante, 2003, p. 106). This clarion call equally applies to developing nations or emerging economies around the world.